Kroger Co. is negotiating for one of its grocery stores to anchor the redevelopment of the old University of Colorado Hospital at East Ninth Avenue and Colorado Boulevard — replacing Walmart, which pulled out last month amid outcry from the neighborhood.

What kind of store, whether it is a King Soopers or a more upscale brand from the Kroger chain, is still being discussed, said Janice Sinden, chief of staff for Denver Mayor Michael Hancock.

Sinden said one option being explored is a Fresh Fare store — one of Kroger’s new-style stores that have upscale meats and seafood, gourmet cheeses and natural and organic foods, as well as chef-prepared meals to take home, besides the usual array of grocery items.

“That’s what we are advocating for, as upscale a market center as we can possibly secure in that community,” Sinden said Tuesday.

King Soopers spokeswoman Kelli McGannon said the grocery-store chain tries to create stores “that meet the needs of each community, and this location would be no exception.”

The deal isn’t complete. Kroger representatives are evaluating the site and expect to make a decision by mid-December.

“The neighborhood trusts King Soopers,” McGannon said. “We recognize that there has been some controversy with this location. King Soopers, as with all the neighborhoods we serve, will continue to be a good community partner as we always have been since we opened our first store in 1947.”

Protesting Walmart

Denver officials hope the news is met with more acceptance from the community than occurred when the last anchor tenant was announced.

Residents criticized the discount retailer for its customer base and employment practices and accused Wal-Mart Stores Inc. of destroying small, local businesses. They launched an anti-Walmart website, covered front lawns with protest signs and argued against the store in public meetings.

Council President Mary Beth Susman and Councilwoman Jeanne Robb — who represent the area — said they would oppose tax-increment financing for a Walmart.

When Walmart pulled out in early October, developer Jeff Fuqua was left scrambling for a new anchor.

Enter Kroger, with 74 stores in metro Denver, including a mega-King Soopers store 2 miles south on Leetsdale Drive in the city of Glendale.

Sinden said city officials and Kroger executives are wary about how the news of the new anchor will be received.

King Soopers president and chief executive Russ Dispense “is excited and afraid too that they could somehow fall into the same trap that Walmart did,” Sinden said.

Hancock said in a statement that the city and its partners have worked “tirelessly for nearly a decade to create a development … that the neighbors — and the entire city — can be proud of.

“I am excited at the prospect of one of Denver’s best-known and -respected retailers stepping forward to work with us in fulfilling our vision for this area,” he said.

City officials believe the right store for the neighborhood will bring in customers and sales- tax revenue.

Smaller store

The new plan calls for a smaller anchor store — 75,000 to 80,000 square feet, requiring less space for parking but also allowing more space for additional tenants.

However, a smaller store that sells mainly tax-free groceries also would generate less sales- tax revenue.

Tracy Huggins, director of the Denver Urban Renewal Authority, is confident that the new numbers would work because CU is willing to accept delayed payment for the $31.5 million sale of the property — receiving roughly $15 million over 15 years. The rest would be paid to the university at the July 31 closing.

The costs of demolition, environmental abatement and adding streets, sidewalks and sewers would be paid for through tax-increment financing.

“The big-box conversation was really hard to have,” Sinden said. “I think the neighbors around the university were anxious about having … a Super Walmart in their backyard. (This) footprint is much smaller. So we’re hoping that that will represent to the neighborhoods that they were heard.”

If everything goes as planned, shops would open in two years.

The site has been vacant since the hospital in 2007 moved to its current home on the Fitzsimons Campus in Aurora.

Developer Shea Properties initially was selected by the city to purchase and redevelop the site, but the company was unable to fulfill its contract.

Sembler Co. of Atlanta stepped in to purchase the site, but changes at the company soon led to another switch. Fuqua took over the contract in March after splitting with Sembler, his former employer.

After Walmart exited, Hancock convened all the parties — CU, Fuqua, City Council members, city staff and the development authority — to come up with another plan, Sinden said.

“Quite frankly, it was to say, ‘We’re going to do this right, not fast,’ ” she said. “And we’re going to really ensure that this is something the community is incredibly proud of. And that is going to take some time. And he put a lot of responsibility on the developer to reach back out into the retail community and come up with options.”

Possible tenants

The new plan creates a walkable outdoor shopping area that would become a central meeting place for the surrounding neighborhoods with senior housing, 325 residential units, a hotel and “neighborhood-scale services,” said Marcus Pachner, a consultant working on the project with Fuqua Development.

“This is a very pedestrian-friendly neighborhood that frankly will blend into kind of the urban fabric of the surroundings,” Pachner said.

Buildings that would remain on the property would include the existing parking structure at Ninth Avenue and Clermont Street and the old nurses dormitory. The existing towers prominent from Colorado Boulevard will be leveled, Pachner said.

Robb said a Kroger store is a much better fit for the area than a big-box store.

“The grocery store is fine. It’s maybe not exciting, but it’s definitely fine,” Robb said. “What we need to work on is mixed uses. We wouldn’t get that with the previous tenant.”

Three neighbors who were opposed to Walmart said they had no opposition to a King Soopers store.

“I think that’s a big improvement from Walmart,” said Katie Lupo,who lives at 12th Avenue and Bellaire Street, north of the development. “I think that will be welcome in the neighborhood. I think we would be behind it. That’s good news.”

Steven Whatley, who also lives on Bellaire Street, said he would be surprised if the main anchor is King Soopers.

“There are a fair amount of grocery stores in the area already,” he said. “In a perfect world, office space and some really nice boutique-type retailers might be best. Depending on what other businesses are included, I don’t know if this will get the neighborhood excited.”

Laure Levin, who lives on Williams Street in Congress Park, said King Soopers is “light-years” better than Walmart.

“I’m just a bit surprised because the feeling as we went through the process was that there’s already a high density of grocery stories in the area,” she said. “And I would be surprised that King Soopers wouldn’t be concerned about pulling traffic from their big store on Alameda.”

She said regardless of what anchors the site, she hopes the city conducts an updated traffic analysis.

Jeremy P. Meyer was a reporter and editorial writer with The Denver Post until 2016. He worked at a variety of weeklies in Washington state before going to the Walla Walla Union-Bulletin as sports writer and then copy editor. He moved to the Yakima Herald-Republic as a feature writer, then to The Gazette in Colorado Springs as news reporter before landing at The Post. He covered Aurora, the environment, K-12 education, Denver city hall and eventually moved to the editorial page as a writer and columnist.